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IAG: BA restructuring may cost 12,000 jobs

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IAG: BA restructuring may cost 12,000 jobs

Old 20th Jul 2020, 11:45
  #1341 (permalink)  
 
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If somebody can post the current BA/IAG trading figures ( including current cash burn , forward bookings, and cash left in the bank ) it just might make some people look at things a bit differently.


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Old 20th Jul 2020, 14:27
  #1342 (permalink)  
 
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The CRS is not a nice idea thought of and funded by BA. It is a response from the pilot workforce and is funded by us. There is no free give away to the pilots. Cut through it all and there is a 20% reduction in crew.

Under this devastating scenario the MOA went out the window and the CRS is our best effort to provide some sort of adherence to it. Without it I think we would see redundancies by fleet.

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Old 20th Jul 2020, 14:48
  #1343 (permalink)  
 
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Cloud1

Tui in my experience always had a good relationship with BALPA as both Management and the Union have a mature outlook rather than 'ye who has the last laugh' which goes on at many Airlines with some showing their true colours now. Sure there are always the 5% unhappy with Management but they are the usual ones that the management and no doubt the Union spend 95% of their time dealing with. CV19 has however bought many BA Nigels down to a level that many Aviation staff have faced during their careers. If I'd have joined BA XX years ago I'd still be there rather than my current airline number XX (and I mean XX not X)
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Old 20th Jul 2020, 16:01
  #1344 (permalink)  
 
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Originally Posted by bex88 View Post
Under this devastating scenario the MOA went out the window and the CRS is our best effort to provide some sort of adherence to it. Without it I think we would see redundancies by fleet.
I doubt BA would risk the litigation of throwing the MOA out of the window. We would certainly see a lot more compulsory redundancies off the bottom and then demotions to fill the FO positions though. BALPAís main aim has been to save jobs and the CRS is indeed achieving that, but I do not believe the majority of the CRS pilots were ever at risk of redundancy themselves.
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Old 20th Jul 2020, 18:05
  #1345 (permalink)  
 
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Under normal circumstances with a smaller headcount reduction I would agree. The MOA has already been cherry picked and ignored.

I have heard “the 320 will bear the CR”, actually that really is not true as a fair number of crew joined onto LH fleets.

The CRS is probably the best outcome given the situation and the original proposal. It’s still rubbish but less so.
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Old 20th Jul 2020, 18:34
  #1346 (permalink)  
 
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Originally Posted by GS-Alpha View Post
I do not believe the majority of the CRS pilots were ever at risk of redundancy themselves.
They would not have been at risk if LIFO was a major part of redundancies. But the complete opposite if BA had gone ahead with redundancies by fleet as they had wanted.

Originally Posted by White Van Driver
However I disagree that the CRS will be the first to be cast adrift in the case of round 2 redundancies. If the current figure of 450 redundancies was to be increased to say 550, the CRS wouldn't be touched but another 100 from the bottom would be made redundant. In the case of more redundancies later this year or into next year, they'll keep the CRS in tact and just chop off from the bottom using the same matrix that has been agreed for this round.
I should just add to this that the cost to BA of the CRS is zero. No point in firing those pilots in later redundancies as savings will also be zero. (The working BA pilots are funding the CRS... salaries, training onto other types, and even the pay point differential between them and new PP1 hires until their retirement)
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Old 20th Jul 2020, 21:11
  #1347 (permalink)  
 
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Think a whole hr dedicated to BA on LBC right now
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Old 20th Jul 2020, 21:14
  #1348 (permalink)  
 
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The CRS is a mechanism to keep 747 pilots employed but not flying at the expense of junior pilots (who would be flying but are now unemployed) and everyone remainingís pay.

Iíll let you decide if thatís fair or not. I know what I think.
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Old 20th Jul 2020, 22:04
  #1349 (permalink)  
 
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Originally Posted by stormin norman View Post
If somebody can post the current BA/IAG trading figures ( including current cash burn , forward bookings, and cash left in the bank ) it just might make some people look at things a bit differently.

If true that IAG liquidity stood at €10.5 billion pre-Covid, and stated cash-burn of £20m per day, that equates to survival of approx 1 year.
Further, if needed, Qatar have said they would inject more equity into IAG, since they view it as a long-term investment.

The cargo revenue goes to an entity called IAG Cargo, so even though BA flies it, this profit is not attributed to BA.

WW interchanged IAG and BA numbers to suit his arguments, and he wasn’t called out on it.

Last edited by 777JRM; 21st Jul 2020 at 09:09.
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Old 21st Jul 2020, 10:45
  #1350 (permalink)  
 
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Theres more to IAG than BA, so that cash burn figure needs to take account of the other businesses in order to get a true figure of a survival period.
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Old 21st Jul 2020, 11:51
  #1351 (permalink)  
 
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Originally Posted by thetimesreader84 View Post
The CRS is a mechanism to keep 747 pilots employed but not flying at the expense of junior pilots (who would be flying but are now unemployed) and everyone remainingís pay.

Iíll let you decide if thatís fair or not. I know what I think.
That is a massively oversimplified and antagonistic view of what's going on.

BA flatly refused a deal to retain all the pilots, a deal which was offered by BALPA and the BACC. So to say the CR is due to the 747 pilots is not only flat wrong, it also puts the blame for CR on your colleagues and not the company position.
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Old 21st Jul 2020, 12:07
  #1352 (permalink)  
 
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Originally Posted by Jumpjim View Post
That is a massively oversimplified and antagonistic view of what's going on.
Nicely put..I had started to construct a response to that post but had so much trouble being polite that I decided it was best not to continue.
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Old 21st Jul 2020, 13:32
  #1353 (permalink)  
 
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Originally Posted by Atlantic Explorer View Post
Theres more to IAG than BA, so that cash burn figure needs to take account of the other businesses in order to get a true figure of a survival period.

True.
However, the other businesses in IAG seem to be getting govt assistance and treating their staff far better than BA ever could (eg. temporary solutions, furlough).
777JRM is offline  
Old 21st Jul 2020, 14:16
  #1354 (permalink)  
 
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Originally Posted by 777JRM View Post
If true that IAG liquidity stood at €10.5 billion pre-Covid, and stated cash-burn of £20m per day, that equates to survival of approx 1 year.
Further, if needed, Qatar have said they would inject more equity into IAG, since they view it as a long-term investment.

The cargo revenue goes to an entity called IAG Cargo, so even though BA flies it, this profit is not attributed to BA.

WW interchanged IAG and BA numbers to suit his arguments, and he wasn’t called out on it.
Some of that cash is also likely to be money for tickets already paid for, and a fair bit of it is likely to need to be refunded.
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Old 21st Jul 2020, 22:18
  #1355 (permalink)  
 
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Originally Posted by stormin norman View Post
If somebody can post the current BA/IAG trading figures ( including current cash burn , forward bookings, and cash left in the bank ) it just might make some people look at things a bit differently.
This guy, Robert Boyle, former IAG director of strategy has got his head screwed on and is publishing some sensible factual stuff on his blog.
If you pop over here you will find it
https://rboyle.co.uk/2020/06/12/you-...till-its-gone/

If you only want a bite-sized chunk, here it is.

So let us do a crude calculation of the predicted liquidity position of IAG and Lufthansa at the end of Q2, by which time both companies are expected to have recommenced “a meaningful operation”. Lufthansa will have liquidity of €4.25 billion (the March position), plus the €9 billion stabilisation package, less three months of cash burn at €800m a month giving €10.9 billion. IAG gave a figure of €10 billion for their liquidity at the end of April, which I think went up from up €0.5 billion from the position at the end of March due to €1.3 billion raised from the UK and Spanish governments, offset by cash burn for April. That suggests a cash burn in April of €836m, slightly below the figure I calculated above. By the end of Q2, they will have burned another €1.9 billion, giving them €8.1 billion. Expressed in terms of their “normal” cash operating expenses when operating at full capacity (where Lufthansa is 1.7x the size of IAG), this gives Lufthansa 115 days of liquidity compared to IAG’s 147 days. Of course they both have many more days of liquidity than this, as this metric assumes zero revenue and full operating costs, but it is a good basis on which to compare the two companies.

Given the amount of assumptions that have gone into these calculations, my conclusion is that both companies will start the third quarter with similar levels of liquidity compared to the size of their pre COVID cost bases, with IAG in a somewhat better position (c 25% better). The big difference, of course, is how much backing it will have required from governments to get to that position. For Germany, it took €9 billion, compared to €1.3 billion for IAG, of which the UK government has only provided €0.3 billion.
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Old 21st Jul 2020, 23:51
  #1356 (permalink)  
 
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Thanks for that. I had the pleasure of listening to Robert talk once and he is indeed a switched into chap; good orator too.
thats am excellent prťcis if where things are; and indeed points to positivities for Q3 and beyond compared to what is in the recent past. Still not in anyway out of the woods but Iíd say the end of the beginning, rather than the beginning of the end.
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Old 22nd Jul 2020, 01:13
  #1357 (permalink)  
 
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Originally Posted by Doors To Manuel View Post
[Quoting another] "Of course they both have many more days of liquidity than this, as this metric assumes zero revenue and full operating costs, but it is a good basis on which to compare the two companies".
I'm afraid that rather takes away from the logic of the argument, particularly for one with all the figures available. If I went to my bank manager and said "here's my cash flow projection, except I haven't put anything in for revenue, or for operating cost changes I've made", can you imagine what the reaction would be ...
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Old 22nd Jul 2020, 14:58
  #1358 (permalink)  
 
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Doors To Manuel

The problem with that article is that he is comparing German Government support for a German company with UK Government support for a Spanish company.
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Old 24th Jul 2020, 23:02
  #1359 (permalink)  
 
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Doors To Manuel

Assuming that there is no significant revenue during the next 5 months, liquidity would be zero. Does IAG have further sources of liquidity? Is it's credit rating investment grade?
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Old 25th Jul 2020, 09:10
  #1360 (permalink)  
 
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BA will survive and prosper but it needs to get a shift on in its reorganization.

The UK government needs to get more proactive in opening up cross border air corridors.
stormin norman is offline  

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